EMI Settles With Spitzer Over Payola For $3.75 million

EMI Group Plc, the world's third-largest music company, said on Thursday it has agreed to pay $3.75 million to settle charges by New York State Attorney General Eliot Spitzer that it made secret payments to radio stations in exchange for airplay.

The music company behind such artists as the Rolling Stones and Coldplay is the last of the big four music groups to settle with the Attorney General's office over allegations of pay-for- play practices, also known as payola, in the music industry.

EMI provided illegal "financial benefits to obtain airplay and boost the chart position of its artists by bribing radio station employees with concert tickets, video games and hotel and air fare expenses," according to a statement from Spitzer's office.EMI said it voluntarily adopted policies last year to prevent such practices and has been working with the attorney general to reinforce these policies.

Artists who benefited from the payola scheme, besides the Rolling Stones and Coldplay, included Norah Jones and the band Gorillaz, according to Spitzer's statement.

Other record companies have settled with the New York Attorney General in the last few months. Vivendi Universal's Universal Music Group agreed to pay $12 million, Sony BMG agreed to pay $10 million, while Warner Music Group Corp. settled for $5 million. EMI is the smallest of the four in terms of U.S. market share.

The Attorney General's office has been investigating pay- for-play practices for nearly two years in an investigation that has included record companies, radio station conglomerates and independent promoters.

"Our investigation is continuing to probe radio conglomerates participation in payola in the music industry," said Juanita Scarlett, spokeswoman for the Spitzer's office.

Spitzer, who is running for New York State governor this year, issued subpoenas to the radio conglomerates last year, including Clear Channel Communications Inc., Cox Radio Inc. and CBS Corp.'s CBS Radio.

In March, Spitzer filed a lawsuit against Entercom Communications Corp. accusing it of soliciting and accepting payments for airplay from record companies.

Source: Various